China’s war on corruption: Where is it headed?

Andrew Wedeman says China cannot sustain its current level of corruption and warns that President Xi Jinping’s anti-corruption campaign is charting a dangerous course.

“When you start pulling the threads [of corruption], this goes all the way back to the retired leadership,” cautioned Wedeman.

by Catherine Schuknecht

International Institute, April 23, 2014 — At a recent lecture sponsored by the UCLA Center for Chinese Studies, Andrew Wedeman discussed the perplexing paradox of corruption and rapid economic growth in China. The speaker warned that President Xi Jinping’s war on corruption could uncover wrongdoing by high-level leaders dating back to the 1980s, resulting in unprecedented political disaster.

Wedeman (UCLA PhD, 1995) is a professor of political science at Georgia State University, where he heads the China Studies Program.

China’s double paradox

Over the past 30 years, China has experienced both a rise in corruption and massive economic growth. It is currently ranked 80th on the the Transparency International Corruption Perceptions Index, yet has had the second-highest GDP per capita growth rate in the world since the 1980s.

This trend is a “double paradox,” explained the speaker, because corruption and economic growth are negatively correlated in economic theory. In other words, rising political corruption should lead to economic decline, a trend Wedeman referred to as “degenerative corruption.”

The exception to the rule occurs in countries where a political organization distributes money in return for political support. This type of “development corruption” temporarily fuels a country’s economy while securing regime survival, at least in the short term.

In China, the well-developed political machine of the Communist Party appears to both practice and fight corruption. Wedeman pointed to three factors that have enabled the country to counter the negative consequences of the phenomenon: timing, the nature of reform and the leadership’s “war on corruption.”

When China began economic reforms in the late 1970s, corrupt practices were not yet embedded in Chinese politics. This allowed the economy to expand before corruption intensified. “Reform involved the transfer of an incredible amount of value from the control of the bureaucracy to the market,” said Wedeman, which “led to the creation of massive windfall profits.” Once economic benefits had been realized, allocation of profits created a market for corruption during the 1990s.

Wedeman claimed that China has survived the surge in corruption because, unlike a typical kleptocracy, it had been engaged in fighting the phenomenon for the past 32 years.“Being corrupt in China is not without risk,” he observed, “somewhere up to a 1,000 officials have received a death sentence or suspended death sentence.”

Although the leadership’s policies have made limited headway, Wedeman argued that the regime has managed to fight corruption more or less to a standstill.

Xi Jinping’s anti-corruption campaign: Why is it different?

“We are in the middle of. . . the most significant anti-corruption campaign since the beginning of the reform period,” observed Wedeman. Since becoming General Secretary of the Chinese Communist Party in fall 2012, Xi Jinping has pursued a deliberate, systematic and dangerous anti-corruption policy.

His campaign differs from those of the past because it is being pursued on four fronts, rather than one. The first front, which Wedeman called a “protracted trench war,” uses tactics in place since the 1980s. “It's like the First World War — lots of bodies; not a lot of decisive action,” he explained, referring to China’s drawn-out fight against mid-level corruption.

The second front consists of low-level Internet “guerrilla” fighting between “Netizens” and local officials. This front is significant, noted Wedeman, because it results in the removal of guilty officials from office within 48 hours after a scandal hits the Internet. (Compared to the “glacial” pace of a conventional prosecution, a two-day turnover is fast!)

In addition, “flank attacks” against commercial corruption are more prolific than in the past. Xi Jinping has personally led attacks on companies and businessmen who have paid bribes for commercial gain, leading to numerous indictments. Finally, the “aerial combat” front is taking stepped-up action against high-level corrupt officials and businessmen.

Before Xi Jinping became General Secretary in 2012, the corruption scandals that broke were often revealed by accident. For example, politician Chen Liangyu was caught by a routine audit in 2006. Six years later, Bo Xilai was arrested for corruption when it became known that his wife was responsible for the murder of English businessman Neil Heywood.

Since Xi Jinping’s campaign began in 2012, scandals have been uncovered in a much more systematic way, rather than by chance. Furthermore, the number of people implicated in recent corruption cases has been much greater than in previous campaigns.

The investigation against retired Communist Party leader Zhou Yongkang — arguably the most powerful person ever to be implicated in a corruption scandal — has implicated over 300 people, including family members and high-ranking economic and political figures.

“When you start pulling the threads [of corruption], this goes all the way back to the retired leadership,” cautioned Wedeman. “When Xi Jinping starts going after corruption involving Zhou Yangkang, he's potentially playing with fire.”
The current campaign could set off a political explosion if Xi Jinping does not devise a strategic way to end it without implicating the highest levels of retired Chinese leadership, he remarked.

Where is China headed?

Although Xi Jinping has taken his anti-corruption campaign father than previous such campaigns, Wedeman argued that it would not eliminate the phenomenon in the country.“Corruption will remain as bad in China in the future as it is now.”

Although the campaign was devised to purge the Chinese government of corruption, it was also intended to be politically advantageous for Xi Jinping. Once he removes Zhou Yangkang and officials connected with him, the Chinese president will be able to handpick hundreds of people for powerful economic and political positions.

However, Wedeman said that China’s recent slew of political scandals did not signal a sudden and unprecedented increase in wrongdoing. “This is not new corruption; this is old corruption,” argued Wedeman, “This is a corruption that China has been living with for 20 years.”

The question of how much longer China can sustain this situation remains unanswered. Wedeman predicted that as the country's growth rate gradually declined, its economy would no longer be able to absorb the negative effects of corruption.